When Lumentum (NASDAQ: LITE) warned that its main customer would cut back on orders, it sent Apple (NASDAQ: AAPL) stock lower. Apple is now in danger of holding the $1-trillion market cap title in the near-term as iPhone unit sales lag. That Apple is no longer releasing unit sales for iPhones is a negative development for shareholders.
Apple will very likely benefit from an uptick in revenues during the holiday period. The iconic iPhone faces little real competition from Android suppliers. The real risk for Apple and for the smartphone market as a whole is a pronounced downturn in the economy. If consumers become more price-sensitive, sales of iPhone and Android devices will fall.
Apple is suited for wherever the economy gets to next. The iPhone 7 and 8 are similar to the X and XS models and good enough that users may upgrade to those models. This will hurt ASP but not profit margins. Ideally, Apple sells more of the latest devices for the highest profitability.
iCloud services and Apple Music both offer high profitability for the company. As long as its customer and their family stay within the Apple environment, its revenue will grow at a good pace.
